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The Weekly Rap! Friday Nov 8th, 2013

The National Debt is currently: $17,135,306,836,783.00 I post this so we will be aware of what we are leaving the next generation.

The Dow last traded at 15,703. The S&P 500 is trading at 1,734. Gold is trading at $1,284 an ounce, while oil futures at $94.68 a barrel. Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.29/Gal.

The FNMA 30-year fixed 3.5% coupon, containing 3.75% – 4.125% mortgages, pretty much the benchmark or how rate sheets are priced these days is currently trading at 100.93 about a 1.25 points (fee) worse in price than where we were last Friday at this time mostly due to the better than expected jobs report this morning. Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate. The higher the number (price), the better the rate.

In economic news this week; the reader’s digest version is we saw a good jobs report this morning based on past reports. That is based on the last years jobs numbers this one looks good. But we still have a long way to go. We should be seeing double or triple these numbers to truly see an economic recovery.

The Commerce Department reported that Factory orders rose (the report used the term “jumped” but I like to be more realistic) 1.7% in September to $490.8 billion. The agency also revealed for the first time that August orders fell 0.1% — that release was shelved due to the government shutdown.

A survey of 73 domestic and 22 foreign banks operating in the U.S. shows that lending terms eased up, but due to increased competition. The Fed’s senior loan officer survey shows that banks made it easier to get commercial real-estate loans but did not substantially ease their terms to households.

Consumers spending tapered off slightly in September. Consumer spending rose 0.2% in September, down from a 0.3% gain in August. The rise in consumer incomes is barely outpacing inflation.

A gauge of consumer sentiment fell this month to the lowest level in almost two years, surprising economists who had expected sunnier views now that the government shutdown is over, according to data released Friday. The preliminary November reading of the University of Michigan/Thomson Reuters consumer-sentiment index hit 72, the lowest level since December 2011, from a final October reading of 73.2.

On the Real Estate front: On a national level: Home prices ticked up in September, pushing annual growth to the fastest pace since early 2006. In September, about five years after the housing crisis started, home prices rose 0.2%, while the annual pace reached 12%, according to CoreLogic. National home prices in September were about 17.4% below a peak level, but continued to increase, supported by pent-up demand and relatively low inventory.

On the Employment front: The Labor Department reported total non-farm payroll employment increased by 204,000 in October. Job growth averaged 190,000 per month over last 12 months. In October, job gains occurred in leisure and hospitality, retail trade, professional and technical services, manufacturing, and health care. Federal government employment continued to trend down. There were no discernible impacts of the partial federal government shutdown on the estimates of employment, hours, and earnings. Hiring for September and August was revised up by a combined 60,000 jobs,. The revised gains along with the big increase in hiring in October suggested the economy might have more strength than previously thought. But again this is one month and we need to see a better trend in order to truly see economic growth.

The unemployment rate ticked up to 7.3% from 7.2% in what was likely a residue of the government shutdown. Federal workers were classified as unemployed under the government’s method for calculating the unemployment rate.

Being the cynic that I am, (I tend to question most things) the surprising increase in overall jobs raises questions about whether the shutdown distorted the government’s normal process of collecting data. Read: How believable is the jobs report?

If you know anyone who can benefit from my services, please call me. My greatest goal is to see clients and friends happy. I guess that’s why I love providing mortgage financing. It’s an immediate gratification when you can help someone purchase a home, or lower their payment on their existing home.

Sincerely,

Bill Bartok

Mortgage AdvisorMLO# 445991

The nicest compliment I can receive is the referral of your family, friends and co-workers.